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Vote Serious Fraud

THE ESTIMATES OF APPROPRIATIONS 2017/18 - JUSTICE SECTOR B.5 Vol.7  161 V O T E S E R I O U S F R A U D

Overview of the Vote

The Minister of Police is responsible for appropriations to Vote Serious Fraud the 2017/18 financial year covering the following:

· a total of $10 million for detecting, investigating and prosecuting cases of serious financial crime. This includes activities directed at making the commission of financial crimes more difficult, and its detection and prosecution more effective, and

· a total of $940,000 for the purchase or development of assets and intangibles.

The Minister of Police is also responsible for a capital injection of $840,000 for the Serious Fraud Office.

Details of these appropriations are set out in Parts 2-4.

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Details of Appropriations and Capital Injections

Annual and Permanent Appropriations

2016/17 2017/18

Final Estimated Budgeted Actual Budget Titles and Scopes of Appropriations by Appropriation Type $000 $000 $000

Departmental Output Expenses

Investigation and Prosecution of Serious Financial Crime (M51) 9,515 9,515 10,020 This appropriation is limited to detecting, investigating and prosecuting serious financial crimes by the Serious Fraud Office, and includes activities directed at making the commission of financial crimes more difficult, and detection and prosecution more effective.

Total Departmental Output Expenses 9,515 9,515 10,020

Departmental Capital Expenditure

Serious Fraud Office - Capital Expenditure PLA (M51) 130 130 940 This appropriation is limited to the purchase or development of assets by and for the use of the Serious Fraud Office, as authorised by section 24(1) of the Public Finance Act 1989.

Total Departmental Capital Expenditure 130 130 940

Total Annual and Permanent Appropriations 9,645 9,645 10,960

Capital Injection Authorisations

2016/17 2017/18

Final Budgeted Estimated Actual Budget $000 $000 $000

Serious Fraud Office - Capital Injection (M51) - - 840

THE ESTIMATES OF APPROPRIATIONS 2017/18 - JUSTICE SECTOR B.5 Vol.7  163 V O T E S E R I O U S F R A U D

Supporting Information

Part 1 - Vote as a Whole

1 . 1 - N e w P o l i c y I n i t i a t i v e s

2016/17 Final 2017/18 2018/19 2019/20 2020/21 Budgeted Budget Estimated Estimated Estimated Policy Initiative Appropriation $000 $000 $000 $000 $000

Case and Evidence Investigation and - 555 295 295 295 Management System Prosecution of Serious Financial Crime Departmental Output Expense

Serious Fraud Office - - 840 - - - Net Assets Departmental Capital Injection

New Zealand contribution Investigation and 32 135 - - - to the International Anti- Prosecution of Serious Corruption Co-ordination Financial Crime Centre (IACCC) Departmental Output Expense

Total Initiatives 32 1,530 295 295 295

164  THE ESTIMATES OF APPROPRIATIONS 2017/18 - JUSTICE SECTOR B.5 Vol.7 1 . 2 - T r e n d s i n t h e V o t e

Summary of Financial Activity

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Non- Departme Departme ntal ntal Transactio Transactio Final Estimated ns ns Total Actual Actual Actual Actual Budgeted Actual Budget Budget Budget Estimated Estimated Estimated $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 Appropriations Output Expenses 10,210 8,961 8,945 8,853 9,515 9,515 10,020 - 10,020 9,625 9,630 9,630 Benefits or Related Expenses ------N/A - - - - - Borrowing Expenses ------

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7 V O T E S E R I O U S F R A U D

Adjustments to the Summary of Financial Activity Table Due to Vote Restructuring

There have been no restructuring adjustments to prior year information in the Summary of Financial Activity table.

1 . 3 - A n a l ys i s o f S i g n i f i c a n t T r e n d s

Total Vote: All Appropriations

The increase in funding for Vote Serious Fraud in 2012/13 to 2013/14 was to increase capacity to meet immediate operational demands arising from increased levels of detected serious financial crime, primarily in the finance company sector. In 2014/15 an additional $1.500 million was allocated from the Justice Sector Fund, as a temporary measure, to maintain capacity at 2013/14 levels. From 2015/16 Vote funding has increased by $2.030 million per year, representing permanent funding to maintain current operating levels and to enhance the corruption function.

A Budget 2017/18 initiative for a Case and Evidence Management System has been approved. This provides for $555,000 operating and $84,000 capital in 2017/18 with an additional $295,000 operating expenditure in each outyear thereafter.

A Justice Sector Fund initiative to fund the New Zealand contribution to the International Anti-Corruption Co-ordination Centre (IACCC) is effective 12 April 2017. This provides for $32,000 in 2016/17 and $135,000 in 2017/18.

THE ESTIMATES OF APPROPRIATIONS 2017/18 - JUSTICE SECTOR B.5 Vol.7  167 V O T E S E R I O U S F R A U D

Part 2 - Details of Departmental Appropriations

2 . 1 - D e p a r t m e n t a l O u t p u t E x p e n s e s

Investigation and Prosecution of Serious Financial Crime (M51)

Scope of Appropriation

This appropriation is limited to detecting, investigating and prosecuting serious financial crimes by the Serious Fraud Office, and includes activities directed at making the commission of financial crimes more difficult, and detection and prosecution more effective.

Expenses and Revenue

2016/17 2017/18

Final Budgeted Estimated Actual Budget $000 $000 $000

Total Appropriation 9,515 9,515 10,020

Revenue from the Crown 9,280 9,280 9,935

Revenue from Others 235 235 85

What is Intended to be Achieved with this Appropriation

This appropriation is intended to increase business and investor confidence in the integrity of New Zealand's financial markets and increase the public and victims' confidence that those who commit financial crime are held to account in order to achieve the outcome of a confident business environment and a just society that is largely free of serious financial crime.

How Performance will be Assessed and End of Year Reporting Requirements

2016/17 2017/18

Final Budgeted Estimated Budget Assessment of Performance Standard Actual Standard

Complaints

Quantity: Number of evaluations initiated by the 15 15 Expire Measure SFO commenced

Timeliness: Percentage of complaints evaluated 80% 80%-90% 80% within 30 working days

Enquiries

Quantity: Number of Part 1 enquiries commenced 30-40 25-30 30-40

Timeliness: Percentage of enquiries completed 80% 80% 80% within three months

Investigations

Quantity: Number of investigations formally 20-25 16-18 Expired commenced

Quantity: Number of Part 2 investigations Revised Measure Revised Measure 14-16 commenced

168  THE ESTIMATES OF APPROPRIATIONS 2017/18 - JUSTICE SECTOR B.5 Vol.7 V O T E S E R I O U S F R A U D

2016/17 2017/18

Final Budgeted Estimated Budget Assessment of Performance Standard Actual Standard

Timeliness: Percentage of cases investigated within 60% within 12 40%-60% within 12 Expired targeted time months months

Timeliness: Percentage of Part 2 investigations Revised Measure Revised Measure Cat.A: 50% within completed within targeted time (see Note 1) 18mths Cat.B: 60% within 12mths

Quality: Percentage of formal post-investigation 90% 90% 90% reviews that meet SFO quality criteria

Prosecutions

Quantity: Number of cases brought to prosecution 10-12 10-12 10-12

Quality: Percentage of defendants convicted New Measure New Measure 80%

Quality: Percentage of formal post-prosecution 90% 90% 90% reviews that meet SFO quality criteria

Note 1 - Category A cases are those that involve high complexity. For example a case that may contain one or more of the following: a significant number of victims, large scale loss or a long period of alleged offending; multiple alleged suspects; inter-agency cooperation; international assistance; legal complexity.

Category B cases are all other cases.

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Serious Fraud Office in the Annual Report.

Current and Past Policy Initiatives

2016/17 Year of Final 2017/18 2018/19 2019/20 2020/21 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000

Case and Evidence Management System 2017/18 1,395 295 295 295

New Zealand contribution to the 2016/17 32 135 - - - International Anti-Corruption Co-ordination Centre (IACCC) initiative

Share of costs for Budget 2015 whole-of- 2015/16 (15) (15) (15) (10) (10) government initiatives

"Right Sizing" The Serious Fraud Office 2015/16 2,030 2,030 2,030 2,030 2,030

Reasons for Change in Appropriation

A Budget 2017/18 initiative for a Case and Evidence Management System has been approved. This provides for $555,000 operating and $84,000 capital in 2017/18 with an additional $295,000 operating expenditure in each outyear thereafter.

A Justice Sector Fund initiative to fund the New Zealand contribution to the International Anti-Corruption Co-ordination Centre (IACCC) is effective 12 April 2017. This provides for $32,000 in 2016/17 and $135,000 in 2017/18.

THE ESTIMATES OF APPROPRIATIONS 2017/18 - JUSTICE SECTOR B.5 Vol.7  169 V O T E S E R I O U S F R A U D

2 . 3 - D e p a r t m e n t a l C a p i t a l E x p e n d i t u r e a n d C a p i t a l I n j e c t i o n s

Serious Fraud Office - Capital Expenditure PLA (M51)

Scope of Appropriation

This appropriation is limited to the purchase or development of assets by and for the use of the Serious Fraud Office, as authorised by section 24(1) of the Public Finance Act 1989.

Capital Expenditure

2016/17 2017/18

Final Budgeted Estimated Actual Budget $000 $000 $000

Forests/Agricultural - - -

Land - - -

Property, Plant and Equipment 130 130 890

Intangibles - - 50

Other - - -

Total Appropriation 130 130 940

What is Intended to be Achieved with this Appropriation

This appropriation is intended to ensure that assets and intangibles required to support the delivery of the SFO's services are routinely renewed and maintained. Expenditure is in accordance with the SFO's capital expenditure plan.

How Performance will be Assessed and End of Year Reporting Requirements

2016/17 2017/18

Final Budgeted Estimated Budget Assessment of Performance Standard Actual Standard

The capital plan developed and managed Capital plan for Completed by Capital plan for throughout year implementation by 30 June 2017 implementation by 30 June 2017 30 June 2018

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Serious Fraud Office in the Annual Report.

Reasons for Change in Appropriation

A Budget 2017/18 approved initiative for a new Case and Evidence Management System includes a capital injection of $84,000 in 2017/18.

170  THE ESTIMATES OF APPROPRIATIONS 2017/18 - JUSTICE SECTOR B.5 Vol.7 V O T E S E R I O U S F R A U D

Capital Injections and Movements in Departmental Net Assets

Serious Fraud Office

2016/17 Estimated 2017/18 Details of Net Asset Actual Projected Schedule $000 $000 Explanation of Projected Movements in 2017/18

Opening Balance 452 452

Capital Injections - 840 New Case and Evidence Management System

Capital Withdrawals - -

Surplus to be Retained - - (Deficit Incurred)

Other Movements - -

Closing Balance 452 1,292

THE ESTIMATES OF APPROPRIATIONS 2017/18 - JUSTICE SECTOR B.5 Vol.7  171

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